- SAP Managed Tags:
Different Types of Projects
1. Enterprise Projects
Enterprise projects in Enterprise Portfolio and Project Management are used to manage cross-industry projects, such as
- overhead projects
- projects with revenue, for example, engineer-to-order projects
- statistical projects
- investment projects
The app Project Control - Enterprise Projects can be used to maintain EPPM projects.
2. Professional Services Projects
Professional services projects in Professional Services can be used to manage customer and internal projects for project-based services. Professional services projects are of two types
- customer projects are used to plan and deliver services to customers
- internal projects are used to collect costs for internal tasks
The apps Create Customers Projects and Create Internal Projects can be used to maintain these types of projects.
Basics
In S/4HANA Public Cloud Edition settlement is available for projects, plant maintenance orders, and service contracts/ orders.
Settlement Object
Objects that have special handling related to settlement:
- Statistical projects will not be settled as these objects do not carry any real postings.
- Objects with revenue postings (projects or service orders/ contracts) are relevant for margin reporting. In public cloud all the information and the characteristics that are needed for margin analysis like for example the customer or the sold material, are updated in real-time for every posting assigned to such an object. Therefore, the settlement to CO-PA, as we know if from the past, is not necessary any longer.
- Settlement is supported for service orders or contracts only if revenue recognition is not used.
- Settlement rules for overhead cost projects can be generate via app “Generate Settlement Rules” (will always create rules for settlement to responsible cost center).
Settlement Rules
Settlement Rule
To be able to settle a CO object, a settlement rule needs to be defined for the sender.
The rule is maintained in the master data of the object (e.g. project master data) or via the apps Manage Settlement Rules – xxx.
The settlement rule consists of one or several distribution rules.
Distribution Rule
The distribution rule specifies which portion of the costs should be settled to which receiver. Each line in the distribution table defines the allocation to a particular receiver. Costs can be allocated to the receivers based on the following:
- percentage settlement
- equivalence numbers
There is no difference between these 2 options beside the fact, that a 100% validation can be configured for percentage rules.
Each distribution rule has a validity period assigned to enable future changes of the rules.
The following settlement types are available
- Periodic Settlement
Only costs posted in the settlement period are settled, if a settlement run is missed out in one period, the costs of this period will not be automatically settled with the next periodic run.
This ensures that costs are always settled in the period they occurred and therefore are not moved across period borders. - Full Settlement
All costs posted to the sender, also costs in prior periods, are settled. This ensures a balance of zero even if late postings to prior period occur
Periodic and full distribution rules can be combined and used at the same time. In this case periodic rules are settled first and in a second step the full rules are used to settle any remaining cost.
Settlement Run
To settle a cost object, users can choose from 2 options. Mostly the mass processing option is used. With mass processing many objects are selected and settled in one run. This could be for example, all projects assigned to one company. The other option is to select only single objects. This option can be helpful if you for example just want to re-run settlement for one object that was causing problems.
To start settlement, you of course need to define the period and fiscal year that shall be settled. Period end closing transactions are posted to the last day of the period. If you want to define a deviating posting date or period, you can use the posting period or posting date field, but this is optional. In addition to this there is the option to enter a special date for currency conversion or for asset capitalization.
There is a difference in ledger-handling for single and mass processing. The mass processing can process several ledgers within one job, but single processing must be done ledger by ledger.
The processing type determines how the distribution rules of the sender are selected. You can choose one of the following processing types:
- Automatic
All distribution rules for a sender are selected.- If a sender only has distribution rules with the settlement type Periodic Settlement, only the settlement period costs are selected and settled.
- If a sender has distribution rules with the settlement type Periodic Settlement and distribution rules with the settlement type Full Settlement, the periodic rules are used first for the costs in the settlement period. If any costs are left over, the Full Settlement rules are used.
- For investment projects, the Full Settlement rules are only used if the project is technically completed (compare with partial capitalization). Settlement to assets under construction is always made regardless of the status.
- Full Settlement
Use this processing type if a sender only contains distribution rules with the settlement type Periodic Settlement, and if a balance check is to be made after settlement.
Costs are settled in the period, then the cumulative order balance is calculated up to the settlement period. If the balance isn’t zero in a prior period an error message is issued during settlement. Before settlement in the actual period, you can repeat settlement for the prior period. - By Period
All distribution rules with the settlement types Preliminary Settlement, Periodic Settlement, and Capitalization in AUC are selected. The Periodic Settlement rules are applied first except for investment measures. - The Preliminary Settlement rules are applied first for investment measures, and then the remaining amount is settled with the automatically generated Capitalization in AUC rules to the asset under construction.
- Partial Capitalization
Use this processing type to partially capitalize an investment measure that isn’t technically completed, so that a part of the total cost to complete assets is settled.
For investment measures, the Partial Capitalization and the Full Settlement processing types are the same.
Example
An order has the following distribution rule:
100% to cost center 1001, settlement type Periodic Settlement.
In period 1, the order is:
- Charged with costs: + 1000 €
- Settled: - 1000 €
Then in period 2, the order is:
- Charged with costs: + 2000 €
- Period 1 is then debited with + 100 €
Settlement for Period 2 is started.
- If you use processing type Automatic, the costs are settled from Period 2: 2000 €.
- If you use the processing type Full Settlement, the costs posted in period 2 are settled, then the cumulative order balance is calculated up to the settlement period. As the balance isn’t zero an error message issued during settlement. You can then repeat settlement for period 1 before running settlement in period 2.
Note
You can also maintain a second distribution rule with the Full Settlement type. The distribution rules would then be:
- 100% to cost center 1001, Periodic Settlement
- 100% to cost center 1001, Full Settlement
With processing type Full Settlement, the system will in a first step use the periodic rule and settle the 2000.00 in period 2. The costs posted to period 1 in period 2 (100 €) are then settled and settlement is posted in period 2. The 100 € are "transferred" from period 1 to period 2.
Settlement Postings
As settlement is moving costs from senders to receiver postings it will result in credit postings on the sender objects and debit postings on the receivers.
There are 2 different options for the account determination for settlement postings, maintained in the allocation structure.
You can either
- use a specific secondary settlement cost element or G/L account
- second option is to use the original G/L account also for settlement
as you can see this second option leads to more fine granular postings for the settlement
It is also possible to use settlement cost elements and settlement by cost element within the settlement for one sender.
For some countries it is necessary to use different settlement accounts for different accounting principles. This can be configured with the setting for Ledger-Specific Allocation Structures.
The second configuration option is the source structure. This can be used if different postings shall be settled to different receivers. In the example primary postings are settled to the first receiver, whereas secondary postings are settled to a second receiver
Note
With S/4HANA cost elements and G/L accounts were merged but at some places the term cost element is still used.
Configuration for Settlement
Project profiles (and order types for maintenance orders) are updated via pre-delivered content. Customers cannot configure those settings.
Project profiles determine the settlement profile.
The investment profile and the setting AuC per source assignment are only relevant for investment projects and can be used if settlement of 1 investment project shall post to more than one asset under construction.
Settlement Profile
The settlement profile contains the most important control indicators for settlement.
- define allowed receiver types for the settlement
- propose default values for allocation and source structure
- the definition of ledger-specific settlement rules (e.g. different settlement receivers in different ledgers/ GAAPs) is optional, if the functionality is needed, it needs to be activated in the profile
- parallel currencies and ledgers (= universal parallel accounting) is active for all public cloud customers
Note
Settlement is not a must. If a project shall not be settled, it just needs to be ensured that the settlement profile ist setup with “can be settled” or “not for settlement”. Otherwise, archiving is checking for a balance of zero and you are not able to archive the object before settlement is done.
Allocation Structure
The configuration done in the allocation structure groups costs on the sender object, in order to define the cost elements used for settlement.
There are 2 options:
- keep the original cost element (= by cost element)
- use a settlement cost element
The system also supports the option to use ledger-specific allocation structures if for example different G/L accounts need to be used for different GAAPs. This can be setup in the SSCUI Ledger-Specific Allocation Structures.
Source Structure
A source structure groups debit cost elements on the sender, which are settled according to the same distribution rule.
You can then use the source assignments in the definition of the distribution rules to define different settlement receivers for different source assignments.
Example
The sender object has incurred both primary and secondary costs. You want to settle 100% of the primary costs to receiver A. For the secondary costs 50% shall be settled to receiver A and 50% to B. To do this, you would create a source structure with two source assignments:
- primary costs
- secondary costs
Settlement Rules for Investment Projects
in public cloud only investment projects are support, investment orders are not available
- When you carry out periodic settlement to CO receivers, the system automatically settles any remaining debits to the asset under construction that belongs to the investment measure
- As soon as an investment measure has technically completed status , the system carries out full settlement.
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